The conversion of Goods and Services Tax Network (GSTN) into a fully government-owned organisation from a non-government, private limited company, is expected to be completed in next three to four months. Several States have already completed purchasing of shares from the existing non-government shareholders, and the company is reminding the other States to complete the process quickly, said Prakash Kumar, CEO of GSTN.
"Almost two-third of the states has already bought the shares from the Banks. We expect the remaining one-third will also buy the shares quickly, we are reminding them constantly ," said Kumar.
"Once that is done, there are some steps such as going back to the Ministry of Corporate Affairs for approval and later to the Board approval, following which it will be fully owned by the government. Hopefully it will be completed in three to four months," he added.
He was in Chennai as part of an outreach programme organised in association with Confederation of Indian Industry (CII) to interact with IT service providers and industries on the e-invoice initiative, to standardise B2B transaction exchange.
The conversion into fully government owned company will not be making any difference in the way it works, since it is already audited by the Comptroller and Auditor General (CAG) of India; is under the purview of the Right to Information Act; and also following all norms by the government for procurement ensuring accountability and transparency.
One area which may be impacted is paying a near-market salary to technology staff. The government is working on a mechanism to pay them better so that the company can continue to attract top technology talent. The high-end talent helps the company to come out with solutions faster, which is important for the entire process.
The company, incorporated on March 28, 2013, at present has the Government of India holding 24.5 per cent equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together holding another 24.5 per cent. Balance 51 per cent equity is with non-Government financial institutions - 11 per cent with the LIC Housing Finance, 10 per cent each with HDFC Bank, ICICI Bank, HDFC Ltd, and NSE Strategic Investment Co.
A GST Council meeting held in May, 2018, decided on acquisition of entire 51 per cent of equity held by the Non-Governmental Institutions in GSTN amounting to Rs 5.1 crore, equally by the Centre and the States governments and allow GSTN Board to initiate process for acquisition of equity held by the private companies.
"Majority of the GST processes including registration, filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports. Considering the nature of ‘state’ function performed by GSTN, Council felt that GSTN be converted into be a fully owned government Company," said the government during the time. The Authorised Capital of the company is Rs 10 crore. The Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST).
Commenting on the e-invoice initiative, which is expected to be implemented on a voluntary basis from January 2020 and later be made mandatory starting with 40,000 companies with Rs 100 crore and above turnover, from April, 2020. Smaller companies will be given more time to get convinced about the system and the aim is to bring in mobile apps which will make it easy for them to get the e-invoicing. There would be multiple websites for the companies to get the e-invoicing, which would help derisk the filings if one of the website encounters some technical problem, he said.